Banks told to warn customers on ATM charges

BANKS THAT decide to charge customers for using rivals' cash machines will be required by law to display warnings, the Government has said. Stephen Byers, the Secretary of State for Trade and Industry, has told banks he will force them to display the charges on machines to warn customers before they begin a cash transaction.

His warning comes ahead of tomorrow's meeting of the board of Link, the inter-bank cash dispenser network, which will discuss plans to charge customers who withdraw money from a bank where they do not hold an account.

The issue caused a rift between Barclays and the Nationwide after the bank announced plans to charge customers of other institutions pounds 1 every time they used its cash machines, and to give its own customers free use of every machine in the Link network.

It broke with the previous arrangement in which most banks charged their own customers a "disloyalty fee" every time they used another bank's machine. The owners of the machine would then receive 30p from the customer's bank.

Nationwide, which did not charge its customers, claimed Barclays had broken the Link agreement and threatened court action. Barclays rejected the allegation but agreed in September to delay its plans until they were voted on at tomorrow's meeting.

Mr Byers has now written to the British Bankers' Association, asking banks voluntarily to display warning signs on machines if new charges are agreed. He said: "I will make it clear that if a voluntary approach is not agreed then I will not hesitate to use my powers under the Prices Act to require charges to be displayed before a transaction."

A Nationwide spokesman said it supported Mr Byers' call for warning signs and said customers should not suffer "punitive" charges.